Southern industrial land rents surge

By Dat Nguyen   October 7, 2020 | 11:29 pm PT
Southern industrial land rents surge
Song Than Industrial Park in the southern province of Binh Duong. Photo by VnExpress/Le Tien.
Rents in southern industrial parks have risen 20-30 percent year-on-year in the third quarter and occupancy rates are high as companies shift their production to Vietnam.

They have climbed to $300 per square meter in Ho Chi Minh City, $200 in Long An and over $150 in Dong Nai, Binh Duong and Ba Ria – Vung Tau provinces, according to a report by real estate consultancy CBRE.

Occupancy rates are over 90 percent in HCMC, and over 80 percent in the other places.

Due to difficulties caused by the Covid-19 pandemic, some parks and ready-built factories are offering rental and fee reliefs of 10-30 percent to their tenants.

The southern region added four new industrial parks in the first nine months, one in HCMC, two in Long An and one in Dong Nai, with a total of 906 hectares.

Supply of ready-built factories is set to rise this year by 28 percent to 2.7 million.

The rising rents and supply came amid increasing demand from e-commerce and logistics companies to expand their storage space and distribution networks.

"Expansion of existing factories and construction of new manufacturing facilities in the context of accelerated relocation will be the main source of demand in the coming time," the report said.

Foreign investors’ demand for land for developing logistics facilities also increased significantly, and this trend is expected to foster demand in the ready-built warehouse market and for industrial lands for logistics development, it added.

Temperature-controlled storage spaces (cold or cool storage) are a new development in the logistics industry as fresh food distribution and sales expand both on online channels and at physical stores, it said.

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